An Analysis by the Republican Staff of the Senate Budget Committee

(This analysis and an examination of the rest of the budget request can be found at the Budget Committee (Minority) website

National Defense section follows:


The National Defense budget function includes the Department of Defense (DOD) in subfunction 051 (about 95 percent of total function costs), Atomic Energy Defense Activities in the Department of Energy (DOE) in subfunction 053 (about 5 percent of the total), and other defense activities in the Federal Emergency Management Agency, the Selective Service, the General Services Administration, and other agencies in subfunction 054 (less than 1 percent).


2001 Actuals 2002 2003 2004 2005 2006 2007

President’s Budget

Budget authority 329.0 350.7 396.8 405.6 426.6 447.7 469.8
Outlays 308.5 348.0 379.0 393.8 413.5 428.5 442.5

OMB Baseline

Budget authority 329.0 350.7 361.2 370.4 378.7 388.0 397.5
Outlays 308.5 348.0 353.9 363.6 375.0 380.9 386.7

Budget compared to OMB Baseline

Budget authority     35.6 35.2 47.9 59.7 72.3
Outlays     25.1 30.2 38.5 47.6 55.8

All figures in billions of dollars.

The President’s 2003 National Defense (050) budget increases BA by $46.1 billion from $350.7 billion in 2002 to $396.8 billion in 2003. This is 13.1 percent nominal growth; it is 9.0 percent real growth, assuming OMB’s projected 3.8 percent GDP Price index inflation in 2003. This will be the largest real growth percentage since fiscal year 1982, when real growth was 10.5 percent, according to DoD budget data.

Summary of DoD Spending

Including the emergency supplemental funding appropriated by Congress in September and December to fight the war on terrorism and accrual of health and retirement recommended by the President, discretionary budget authority for the Department of Defense (subfunction 051) is increasing from $318.5 billion in 2001 to $333.7 billion in 2002 to $379.3 billion in 2003. These figures mean nominal growth rates of 4.8 percent and 13.7 percent for 2002 and 2003, respectively, and they mean real growth rates of 4.1 percent and 9.9 percent respectively. Since President Clinton’s initial 2001 budget request for the Department of Defense of $291.1 billion, spending for that agency will have increased in 2003 by $88.2 billion, or 30.3 percent in nominal terms and 24.7 percent in real terms.

Highlights of the President’s 2003 request

— $7.8 billion for missile defense, plus an additional $815 million for space-based laser research to detect missile attacks, thereby making a total of $8.6 billion, a $300 million increase over 2002.
— $9.9 billion for “Science and Technology,” a 2.7 percent real increase.
— $961 million to develop the Navy’s new “family” of surface combatants.

Summary of DoE Defense Activities

DoE defense activities increases $500 million to $15.6 billion, (3.3 percent nominal growth and 0.5 percent negative real growth). Virtually every account in the 053 subfunction appears to receive only minimal nominal growth and decline in terms of real growth.


To put the President’s budget request in historic perspective, Figure 1 shows post-World War Two Department of Defense budget authority in constant dollars. Note that the proposed spending in 2003 ($379 billion) exceeds the “Cold War Average” ($335 billion) by $44 billion.

The increases for 2003 are major when considered either as a year-to-year increase or in their historic context. Despite the demise of the Soviet Union as America’s only super-power adversary, overall spending levels remain above what they were – on average – with a super-power adversary in existence. On the other hand, when specific funding levels for selected areas are reviewed, there are clearly areas that are not receiving generous funding. Among these are Department of Energy Defense Activities, shipbuilding, military construction, Science and Technology, all forms of military training, overall depot maintenance of military hardware, and Navy flying hours.

When he addressed the National Defense University at Fort McNair on January 31, Secretary of Defense Rumsfeld articulated what appears to be a realization brought to the fore by September 11 and its aftermath. He said, “The notion that we could transform while cutting the defense budget over the past decade was seductive, but false.” Clearly, the Administration has set out on a new course of increases in the defense budget well beyond those contemplated earlier.

Performance-Based Government

The basic budget volume, “Fiscal Year 2003 Budget of the U.S. Government,” presents on pages 87 - 101 assessments of various programs and policies of the Department of Defense. Programs and policies for “Military Readiness,” Military Compensation,” and Army and Navy “Family Housing” are rated as “effective.” “Cooperative Threat Reduction” and “Science and Technology” are rated as “moderately effective.” And Air Force “Family Housing,” Infrastructure” (i.e. the military base infrastructure), “Weapons Systems Cost Control,” “Chemical Demilitarization,” “DoD-VA Coordination,” “Human Capital,” “Competitive Sourcing,” and “Financial Management” are all rated as “ineffective.”


The  President's Budget Request for Fiscal Year 2003
National Defense Section